This proposal is a revision of application number R03 MH074471-01 which was reviewed February 9, 2005 by the Mental Health Services Research Review Committee. The application has been substantially revised to address reviewer comments. Data base descriptions have been expanded, outcome measures are better described, the analysis plan and power calculations have been simplified and clarified, and the budget has been re-allocated. In the meantime, policy-makers remain greatly interested in the impact of Medicaid reductions on individuals with severe mental illness. Indeed, people with severe mental illnesses such as schizophrenia or bipolar disorder depend heavily on Medicaid to pay for services including outpatient care and medications. Unfortunately, states have recently reduced Medicaid enrollment and-or benefits. The proposed federal budget also anticipates notable shrinkage in Medicaid. The impact of this service reduction remains to be seen. Yet this information will be of considerable interest to policy-makers. Oregon provides what may well be the nation's most dramatic example of Medicaid enrollment and benefit reductions. Beginning in 2000, Oregon faced substantial unemployment associated with declines in manufacturing, exports, and high technology. In response, the Oregon legislature eliminated all Medicaid coverage for large numbers of people while curtailing mental health, substance abuse, and-or pharmacy benefits for other groups of Medicaid clients. The purpose of the proposed secondary data analysis project is to examine the impact of these cutbacks on people with severe and persistent mental illnesses such as schizophrenia or bipolar disorder. This observational study will examine Oregon Medicaid clients who had used mental health services prior to the state's massive Medicaid reductions in 2003 and 2004. Data will be obtained from several linked information systems operated by the state mental health agency, the state Medicaid agency, the state police, the prison system, sheriffs, and the state vital statistics agency. Outcome measures will include psychiatric hospitalizations, arrests, and mortality. Rates of these events will be compared between time periods when clients were and were not receiving outpatient services and-or medication. Analyses will take into account varying "times at risk" for subjects who may be hospitalized or arrested. The results will be of keen interest to decision-makers who determine Medicaid policies. [unreadable] [unreadable] [unreadable]